Key Takeaways
- Nvidia and Oracle are poised for substantial earnings from Texas’s new AI data center, Stargate.
- Nvidia could potentially earn up to $20 billion from GPU sales and an additional $5 billion from networking.
- Oracle Cloud Infrastructure is estimated to gain over $2 billion, particularly by hosting OpenAI’s operations.
- This new facility is vital for OpenAI to expand its AI development and meet growing demand.
A massive new AI data center in Texas, known as Stargate, is set to create significant financial gains for tech giants Nvidia and Oracle. UBS analysts project impressive figures, with Nvidia potentially seeing up to $20 billion in revenue from its graphics processing units (GPUs).
When the Abilene, Texas, facility reaches full capacity, it could require around 400,000 of Nvidia’s advanced GB200 GPUs. This demand translates to about $20 billion in sales for Nvidia, plus an extra $5 billion from networking hardware, as OpenAI expands its computing power through partnerships.
Oracle is also in a strong position. Its Oracle Cloud Infrastructure (OCI) could host a 100,000-GPU cluster in the first phase alone. This could bring in at least $2 billion for Oracle, especially as OpenAI might shift more of its computing tasks from other providers.
For OpenAI, the company behind ChatGPT, this increased capacity is crucial. Recent shortages of GPUs have limited their ability to meet surging user demand and roll out new products. The additional resources from the Abilene site will help OpenAI speed up its development plans and regain momentum.
Analysts Karl Keirstead, Timothy Arcuri, and Radi Sultan from UBS suggest that Stargate’s sheer scale, combined with OpenAI’s push for more control over its infrastructure, could significantly alter the competitive landscape for AI infrastructure providers.
This development is noteworthy for investors because Nvidia’s GPUs and Oracle’s cloud services are central to the burgeoning AI industry. Securing large, long-term commitments at Stargate could be a major boost for both companies’ future growth, according to GuruFocus.
